Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Cargo Cult Economics (by Springheel Jack)

By -

There's actually not a huge amount that's interesting on the charts for today, and I'm in a slightly whimsical mood, so I'll show the equities and TLT charts for today and move on to some more interesting charts that I think are worth a look. On the SPX daily chart SPX opened and closed above the upper bollinger band on Friday and hit the probable rising channel resistance that I was looking at as resistance on Friday morning. So far we are seeing reversal there, and as long as that holds, we may well now see a significant retracement that would target channel support, currently at 1400 and rising. There are obvious support levels at 1440 and 1420 (descending triangle top) and I would expect one or the other to be close to such a retracement low:

(more…)

Forks in the Road (by Springheel Jack)

By -

Every so often you reach an important fork in the road where a market must take one way or the other, and once taken, the option not taken becomes very low probability. Yesterday was such a day. I told my brother in the morning that if we were going to see a major top on equities in 2012 then that was likely to be yesterday around 1440 SPX. Obviously QE3 was announced in the afternoon and 1440 was broken with a lot of confidence. I'd like to see that confirmed with a weekly close today over 1450, but I'm now no longer seriously considering the possibility of a major top in equities in 2012, and am writing off all the huge bear patterns that have formed over the last three years on many instruments and indices as a huge bear trap. I'll be expanding on that with various charts in the next few days but it what it is, and we are where we are. The trend is now most likely up well into 2013. 

(more…)

The Age of Fed Bubbles

By -

We have reached a very important crossroads on bonds and equities as we wait to see whether the Fed will announce QE3 today. I was writing about the likely test of this level on SPX in my weekend post on the 19th August at Marketshadows and you can see that here. I've updated the chart but have left the comments on the chart as I wrote them then and they're well worth a read again today I think:

(more…)

Beyond the Looking Glass

By -

Obviously the most important things to watch this week are the central banks, as they reveal whether the economic situation is desperate enough for them to print enough money to set off a flight from cash into assets, and thereby spark off another leg of the bull run in equities. It really is a funny old world nowadays. 

The most important decision should be made tomorrow, and that is when a German court will rule on whether the proposed ECB play to print money to buy EU sovereign bonds is illegal under German law. I hear that Morgan Stanley is suggesting 40% odds that it will be ruled illegal. I'm surprised the odds are as low as that. If the German court backs the plan then European QE is on, which would look bullish. If they don't the prospects for the the Euro and equities will look grim.

(more…)

SPX 1440 Area Pivot Test (by Springheel Jack)

By -

Well that was a very strong trend day up yesterday after the ES descending triangle broke up. The ES pattern target was reached near the trading hours close so that pattern is no longer in play. Somewhat to my surprise SPX closed an impressive 8 points over the upper bollinger band and that's bullish, in the sense that yesterday's high was unlikely to be a major high, and a higher high should be expected. 

On the bigger picture though this close well above the bollinger bands has only been seen once before in 2012, and that was in the March final move up into the April 2012 high. That was also a move out of a bollinger band pinch on the daily chart. Of the the four closes well below the bollinger bands since the start of August last year, all preceded significant lows within five days, and only in August 2011 (also from a bollinger band pinch) did the move continue strongly after that close, with in that case two more trend days closing well below the bollinger bands as well:

(more…)